Stricter U.S. Gas Standards Stalled

Gasoline may be more expensive than ever in the United States, but talk is still cheap on Capitol Hill. Flocks of bills promoting automobile fuel efficiency and alternative fuels, which took flight on soaring rhetoric last spring, have dropped to the ground like so many downed birds. Nearby, the special interests stand with shotguns still smoking.

Photo: Robert F. Bukaty/AP Photos

High Prices, Big Cars

A Hummer, a kind of super sports utility vehicle made by General Motors, tanks up. As U.S. customers find it can cost more than a hundred dollars to fill up such cars, they are starting to consider other transportation options.

Congress had tried in previous sessions to increase Corporate Average Fuel Economy (CAFE) standards for passenger automobiles from a fleetwide average of 27.5 miles per gallon (8.55 liters per 100 kilometers), where they have been stuck since 1985. With gas prices at more than US $3 per gallon [see photo, ”High Prices, Big Cars”], Representatives Sherwood Boehlert (Râ''N.Y.) and Edward Markey (D-Mass.) thought that they had the political impetus they needed to pass a bill that would increase CAFE standards for both cars and light trucks—light trucks have had a separate standard—to 33 mpg (7.13 L/100 km).

Boehlert, who will retire this year as chairman of the House Science Committee, has been tirelessly pounding home the main message of the influential 2002 report issued by the National Research Council, Effectiveness and Impact of Corporate Average Fuel Econ­omy Standards . ”The technologies needed to meet the standards our bill sets already exist,” Boehlert says. ”Indeed, some of them have already been surpassed since the report was issued in 2002.”

Rather than boost CAFE standards as such, the Bush administration has preferred to give the National Highway Traffic Safety Administration the authority to change the way the standards are figured for passenger cars to achieve some of the same effect. It has moved to a method that focuses on footprint, a measure of a car’s wheelbase, and away from automobile weight and fleet averages [see box, ”Calculating CAFE”].

Last March the highway safety administration, which already had the authority to use the footprint method to determine CAFE standards for the light truck category, adopted that method for cars as well. The result is that average miles per gallon for sport utility vehicles (SUVs), small trucks, and minivans will increase from 21.6 mpg on 2006 models to 24 mpg for 2011 models on an industrywide scale. The increase is better than it looks, because huge vehicles like Hummers were included in that group for the first time.

But when a footprint bill came be­fore the House Energy and Commerce Com­mittee in May and passed, Markey tried to attach an amendment with his preferred fuel mileage boost to 33 mpg. He lost by a vote of 3617. Michigan Representative John Dingell, the committee’s senior Democrat and a close ally of the automobile industry, led a number of other Democrats in opposition to the Markey amendment, which was also opposed by some Republicans.

In the estimation of Eli Hopson, the Washington representative of the Union of Concerned Scientists, not even the underlying footprint bill, which made it through the committee, will pass the full House. That view is seconded by Joe Pouliot, Boehlert’s spokesman, who says there are three separate camps of House members with three mutually exclusive approaches to higher fuel efficiency, none of which commands a House majority: (1) no CAFE changes, no way; (2) CAFE light, that is to say, the footprint approach; and (3) CAFE heavy, the Boehlert-Markey alternative.

Inaction suits the auto companies just fine, and this goes as well for the main union representing their employees, the United Auto Workers. Alan Reuther, the legislative director of the UAW, told members of the House committee that imposition of a higher miles-per-gallon requirement ”would severely discriminate against full line [auto] producers whose product mixes contain greater percentages of larger cars and light trucks.” The UAW also opposes a shift to a footprint calculation for autos, because, it says, dropping the fleetwide average would theoretically allow the Big Three U.S. automakers to leave the production of smaller cars to foreign manufacturers. In the current system, U.S. carmakers need to make small cars in the United States to balance out their many SUVs; a footprint system would render that balancing unnecessary.

In the Senate, Democrat Dianne Fein­stein of California and Republican Olym­pia Snowe of Maine have been pushing a 35-mpg (6.72L/100 km) bill. But some senators who normally are attuned to the environment and concerned about the country’s ever greater dependence on foreign oil have been even more sensitive to the concerns of autoworkers. For example, New York Senator Hillary Rodham Clinton, also a Democrat, has gently spoken in favor of boosting fuel economy ”responsibly without needlessly sacrificing safety or American jobs.” Meanwhile, fuel economy standards are much stronger in some other places, from Europe to China [see graph, ” U.S. Fuel Standards Lag ”].

The auto industry has argued that it is too expensive, for both manufacturers and consumers, to adopt the engine and transmission technologies identified in the 2002 National Research Council report. Instead, they say that the way to conquer the United States’ addiction to foreign oil is to roll out more alternative-fuel vehicles, a vision the companies are propounding in print ads and Washington-read opinion magazines. The auto companies point out that there are already 8 million alternative vehicles on the road in the United States and that there will be 1 million more by the end of 2006.

Of that total, boast the companies, there are 21 different car makes—5 ­million vehicles in all—that run on E85, a mixture of 85 percent ethanol and 15 percent gasoline. But E85 is more expensive than ­gasoline, it provides inferior fuel efficiency, and it yields little if any reduction in greenhouse gas emissions. What’s more, ”there is currently little customer demand” for E85 vehicles, concedes Reg Modlin, director of environmental and energy planning for DaimlerChrysler Corp., and there are only 650 service stations nationwide that carry E85. ”Congress should help in accelerating the growth of ethanol production, distribution, and retail-sales infrastructures through tax incentives, capital depreciation allowances, or other fiscal instruments,” Modlin says.

Sponsorship of E85 infrastructure legislation has already begun: a couple of bipartisan teams have cropped up in Congress, paralleling the Boehlert-Markey partnership. The Biofuels Secur­ity Act, for example, would require major oil companies to increase the number of E85 pumps at their service stations by five percentage points a year.

In addition, the biofuels bill would create a new consumer tax credit for the purchase of ”flexfuel” vehicles if the vehicles have no fuel efficiency loss from the use of E85 as compared to regular gasoline. ”We understand that there is technology available—for example, a Saab flexfuel E85 vehicle on the market in parts of Europe—allowing vehicles to have no fuel efficiency loss when burning E85 in comparison to gasoline, and perhaps even some mileage gain,” says Senator Tom Harkin, an Iowa Democrat and a cosponsor of the bill.

Disputing that view is Susan Cischke, vice president of environmental and safety engineering at Ford Motor Co.: ”We’ve heard from many people that all it takes to make a flexfuel vehicle is ’a little tweak to the chip that runs the engine.’ I wish it were that simple, but it’s not.”

Big oil has big problems with the biofuels bill, mainly because of its five-percentage-point mandate, and with other ethanol bills, such as the ”10 by 10 Act,” which would require refiners to blend at least 10 percent ethanol into each gallon of gasoline by 2010. Autos can use a 10-to-90 blend without any changes to an engine.

At the American Petroleum Institute, an organization in Washington, D.C., that represents the big oil companies, Ed Murphy, group director of refining marketing, says that the institute strongly opposes any bill that mandates installation of E85 pumps and tanks. He argues that even if 100 percent of service stations offered E85, consumers wouldn’t buy it because of its higher cost and lower performance. E85 proponents, Murphy complains, are engaged in ”a cynical attempt to appear green.”

It appears, in any case, that the institute has little to worry about. Bob Dinneen, president of the Renewable Fuels Association, an ethanol industry group in Washington, D.C., says he has little hope, realistically, that Congress will enact any kind of biofuels legislation any time soon. ”It is a fairly dysfunctional Congress right now,” he observes glumly.